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Vouchers: Another Central Plan

Mises Daily: Tuesday, December 23, 2003 by

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[A version of this review of School Choices: True and False by John Merrifield (Oakland: The Independent Institute, 2002) appeared in the Journal of Libertarian Studies 17.2 (subscribe)]

The mantra of "school choice" is getting louder. The wholesale failure of the K-12 public school system to adequately educate children, no matter how much money is spent per pupil, is universally acknowledged by all but the most diehard teacher union bureaucrat. Educational reform is a leading topic of governors, state legislators, members of Congress, teachers, school boards, presidential administrations, think tanks, and concerned parents.

By far the most popular reform proposal is to give parents a choice where they want to send their children to school, or at least that is how it is often expressed. What this usually entails is an educational voucher that parents can redeem at a private school.

John Merrifield's book School Choices: True and False is a critique of current school choice programs and proposals that emphasizes competition in education as the means of bring about real reform in education. Merrifield, who received his Ph.D. in economics from the University of Wyoming, and is currently a Professor of Economics at the University of Texas at San Antonio, is no neophyte on the subject of school choice. In addition to his current book, he has recently written two major monographs on the subject, a book and many articles. In addition to writing on the subject of school choice, Merrifield is a frequent guest on television and radio programs in which the issue is discussed and debated.

Between a brief introduction and an even briefer conclusion, School Choices: True and False contains eight chapters that progress from the current state of the public school system to problems with current reform proposals to the author's policy requirements of a competitive education industry. Although the main focus of the book is on voucher proposals and programs, other topics addressed include charter schools, tax credits, the politicization of public education, government inefficiency, bureaucracy, and regulation, educational systems in foreign countries, magnet schools, school districts, and teacher unions.

Merrifield begins in the introduction with a clear thesis: "Genuine competition is the only true reform catalyst" (p. 2). There are two things about competition in education that the book focuses on. The first is the identification and discussion of "the critical elements of a competitive education industry, describing the foreseeable outcomes of competition and the transition to it" (p. 2). And second, the failure of current voucher programs and proposals because "choice advocates have forsaken and endangered the only truly effective reform catalyst—competition—mostly unwittingly, but often intentionally" (p. 2). Although Merrifield succeeds on both counts, because he falls short of advocating the complete separation of school and state, he fails to present us with what real competition in education would actually be like. Government interference in the market always distorts real competition.

Numerous myths have been perpetuated about education on both sides of the school choice debate, and Merrifield exposes many of them on both sides. When he relates that "our system is so old that most people equate schooling with tax-funded, government-run schools" (p. 13), he strikes to the heart of what should be the issue in education, even though he himself never rejects the notion of "tax-funded" schools. He takes to task those who believe that inner-city schools are the problem, but suburban schools "are at least okay" (p. 13). Severely under-prepared college freshman, declining test scores, poor analytical skills, and students who cannot demonstrate basic literacy say otherwise.

Although home schooling is seen by many as producing a superior product, Merrifield insists that "if it were not for the profound failure of public schools, it would be no more likely that home schooling would produce superior results than, say, home television repair" (p. 3). Using the example of people having freedom in the old Soviet Union to shop at the best government stores, Merrifield shows that freedom to choose among government schools is not school choice at all.

Charter schools and tuition tax credits are also harshly criticized by Merrifield. He documents that the "expected independence of charter schools is largely an illusion" (p. 30). The charter ideal of an autonomous public school he considers a "fantasy" (p. 30). Merrifield further points out that nonrefundable tax credits, where every dollar of private-school tuition paid reduces taxes by one dollar, would not really help anyone. The rich have the money to send their children to whatever private school they wish regardless of any tax break they will receive, while the middle class and the poor, who pay little or no income tax, would not be helped by a tax credit at all.

Voucher programs currently underway in Florida, Milwaukee, and Cleveland receive Merrifield's greatest attention and disdain. Not, however, because they are voucher programs, but because they limit participation to low-income parents and low-performing schools (with the state grading its own schools), do not allow for add-ons (supplementing the tax-funded voucher to send a child to the higher-priced private schools), and because they are just plain too small to provide us with any meaningful results.

As these reform proposals relate to Merrifield's theme of competition, he concludes: "The modest voucher, tax credit, and public-school choice programs (including charter schools) widely touted as experiments lack nearly all of the key requirement[s] for competition. They move only a relatively few children, mostly among existing schools; leave the broken system intact and sanctify its key elements; and mislead observers as to the nature of the real K-12 problem—a low-performing system, not isolated low-performing schools" (p. 45).

Merrifield's solution to the school reform problem is not an end to the public school system, voucher programs, or the federal control of education. Instead, he advocates publicly-funded, universal, child-based vouchers. His minimum policy requirements of a competitive education industry are in part (pp. 60–62):

  1. Parental choice alone decides each school's share of state and local government funding.
  2. Equal public funding follows a child no matter who owns the school.
  3. Parents must be free to buy more schooling than public funds alone will allow, but without losing access to public funding.
  4. Competition must begin with state and local K-12 spending at least at the level that existed prior to the policy change that facilitated competition.
  5. Federal K-12 funding should continue to provide supplemental public support to special-needs children on a case-by-case basis.
  6. The government must define what constitutes a "school," including a minimum enrollment.
  7. There must be a way to verify the enrollment of each school.

Under the heading of "key policy options" (pp. 62–64), Merrifield leaves it to the government to "determine the boundaries of its role as information provider and data generator, including standardized testing requirements and content" (p. 63). He further insists that "states would have to define the term school to determine eligibility to receive public K-12 instructional funding" (p. 63). To help states define what a school is, Merrifield believes that they should rely on definitions in "compulsory attendance laws" (p. 63).

There are major problems with Merrifield's proposals. First, if the state decides what a school is, then a universal voucher is not a universal voucher at all. There would be no school choice for parents who wish to send their children to "non-traditional" private schools that do not take orders from the state regarding textbooks, teacher qualifications, integration, or curriculum requirements. There would also be no school choice for parents who wish to send their children to "non-traditional" religious schools that, by their very nature, are highly discriminatory in regard to hiring and admissions. A school deemed by the state to be "extremist" (Merrifield's word, p. 61) would not be eligible for the voucher program.

The second problem concerns government regulation of private schools that take vouchers. I find it incredible that Merrifield can state: "I am not convinced that a refundable tax credit or fully funded voucher risks any more regulation of the private sector than exists now or will exist in the near future. But even if the risk were greater than with other approaches, the potential benefits of system transformation are worth it!" (p. 65).

It is inconceivable that the government (federal or state) would ever provide money to parents or schools without any strings attached. In the aforementioned article that Merrifield wrote on the subject of school choice, he gives more attention to libertarian critics of school choice who are concerned with government regulation having an adverse effect on private schools. The reference in his article to the works of Richman, Rockwell, and Rothbard would be just as appropriate here.

The third problem with Merrifield's proposals relates to the distortion of the marketplace that universal vouchers will cause. As an economist, Merrifield should realize that his universal voucher program will establish a floor under which tuition will not go below. No private school would have any incentive to compete on cost, and as a consequence, prices will be higher for everyone. This would be true even if a fully refundable tax credit was used instead of a voucher.

The fourth problem concerns the increased dependency on the government that vouchers will foster. Parents will look to the state as the sole provider of educational funds for their children. Just like many parents look to the state already for food stamps, medical care, housing subsidies, and assorted welfare programs. The state may very well embrace universal vouchers if it sees how it can use them to its advantage.

The fifth, and most egregious problem with Merrifield's proposals, is the matter of funding. Merrifield's universal, child-based voucher is publicly funded. In fact, under his proposal, there would be public funding of education even if there were no public schools. But if all the money currently spent on education was instead given to parents in the form of a voucher to spend at any school they wished, then the public school system could and should be abolished. And even it were not abolished immediately, the mass exodus of students would certainly cause it to substantially decline.

And if the public school system were abolished, or even rendered irrelevant, what would be the point in collecting tax money from all citizens and redistributing it to those who have school-age children? How is this any different from a Great Society redistribution scheme? So whether we have public schools or not, why should each citizen be forced to pay for the education of each other citizen's children? And to make matters worse, voucher funding comes from "fresh money." No current voucher proposal even hints at a reduction in funding for public schools to pay for vouchers. In short, Merrifield's "competition" and "choice" could, in practice, amount to vast wealth redistribution and another layer of educational central planning: not choice but market-based socialism.

School Choices: True and False should cause libertarians and conservatives who favor current voucher programs and proposals to rethink their position. Critics of vouchers, whatever their political or economic persuasion, will find in this slender volume much useful information and insightful analysis on the problems with current voucher programs in Florida, Milwaukee, and Cleveland, as well as the myriad calls for reform and the proposed solutions to the crisis in public education. However, for those principled libertarians (and few conservatives) who reject, root and branch, government- (i.e., taxpayer-) funded education of anyone, the book will be a disappointment because the author advocates publicly-funded, universal, child-based vouchers.

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Laurence M. Vance lives in Pensacola, Florida. vancepub@juno.com See also other Mises.org articles on school vouchers.